SDS and Appeals: Ask Andy Answers

We’re now into April and the new off-payroll rules are here. There’s no last-minute reprieve on the way so now really is the time to ask any questions about your status, the rules themselves, or their implications. Luckily, we have an expert on hand in the form of Andy Vessey, Kingsbridge’s Head of Tax, who has more than two decades of experience working with IR35 and successfully defending contractors against investigations.

We’re offering contractors the opportunity to send in their questions to Andy (find out how at the end) and we’re publishing the answers here on our blog. So read on for some IR35 Q&As…

I’ve just had a client push through a blanket decision (non-decision, in their opinion) to work with contractors on a PAYE basis or through an umbrella company. I asked about the appeals process for current workers and they are refusing to put anything in place, saying that they are not making any determinations and so there is nothing to appeal against. Surely they have made a decision or determination so have to provide one?

If the end client has made a conscious decision not to hire PSCs in favour of agency PAYE or umbrella, then they are correct in their assertions. This is their prerogative to make such a business decision, and as such there will be no requirement to engage with the off-payroll rules.

I will be opening the company and the contract, signed between the non-UK company and me. The confusion is they will pay me a fixed salary, shares, holidays etc. What is your view on the above please?

While there are other status factors to consider in forming the overall picture of employment versus self-employment, being rewarded with a raft of employee-type benefits is not helpful as you are supposed to be running your own business and this would certainly aid HMRC in arguing that you are a disguised employee.

I’ve recently started on a new contract which is outside IR35, but have been told that as of April it will be inside. I have challenged my SDS on three counts, of which two have no bearing on my status but the one that ‘places me outside’ is working hours. I interpret that my status is the programme of work dictates hours and days etc. plus my contract indicates a day rate (only Mon-Fri). The response I received from my client is ‘Control over when your work is done – our view is that you’re expected to work during normal working hours on weekdays and, although there might be times when additional hours are required (e.g. evenings/weekends), this would be no different to the way in which our employees work’. My question is if my contract doesn’t state that, how can this be answered on an Assumption/Expected procedure? Also, I was asked why am I challenging this SDS as the job should have been advertised as inside IR35 as of April. Is it my right to still challenge this? 

While you have the right to dispute an SDS, the end client does have a point in asking why you are doing this when it has been advertised as an ‘inside’ IR35 role. They have clearly satisfied themselves that the position is within the scope of the off-payroll rules and, as such, are unlikely to reverse that opinion unless they have made an error(s) in any way or new factors arise that point towards self-employment.

Although there may be no reference to working time in your contract (although if you are paid a day rate I would expect a professional working day to be defined) if the reality is that your end client dictates your working hours then, as is the case in most IR35 disputes, the working practices carry more weight than the contractual arrangements.

How to Ask Andy…

We’ll be continuing our Ask Andy series throughout April so there’s still time to get your questions in. Simply complete our online form and then Andy will do his best to answer right here on the Kingsbridge blog.

Meanwhile, if you have any queries about your IR35 status and want to know definitively if you should be inside or outside IR35 then the Kingsbridge IR35 Status Tool is for you. For just £50 plus VAT, the tool – developed by Andy himself – will give you a quick, accurate IR35 status along with a comprehensive report detailing the strengths and weaknesses of your position.

And if your result is borderline? Well, that’s the clever bit. In that case, your answers to our questions are passed to one of our human in-house IR35 specialists for review. They will manually go through everything (potentially coming back to you for some more details) before giving you a determination that you – and everyone in your contractor supply chain – can be confident in.